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Capital Markets DayNovember 2008

Mine cost drivers

Jan MoströmPresident BA Mines

Mining

DRILLINGDEPOSIT EVALUATIONFEASIBILITY STUDY

LOADINGHAULAGEHOISTING

ROCK SUPPORTCHARGINGBLASTING

LEACHING

FLOTATIONGRAVIMETRY

WASTE ROCK

ORE RESERV

ORE

GRINDINGCRUSHING

TAILINGS

DISPOSAL(TAILING DAMS, DUMPS AND MINED OUT STOPES

CONCENTRATES SMELTERS

METALS

SX EWCRUSHING HEAP LEACHINGDUMP LEACHING

MINE

MILL

LEACH/SX EW

Two main types of mines

Open pit miningRoughly ten times lower in cost per ton compared to under groundminingSlope stability decide waste/ore ratioWith low grades a high production rate is neededBig equipment for high volume production

Under ground miningUnder ground mines commonly have lower production rateIncreased cost to infrastructure and ground supportMore up front development workOften smaller ore bodies but with higher grades

Mine design

Most important factors– Knowledge of ore body and rock conditions– Efficient mine infrastructure– From basic design establish plans in long and short term for mining out the ore reserve

Mining method– Method selection crucial– Many criteria for method selection– Shape of ore body and rock quality– Best suited scale of equipment and stopes– Amount of ground support needed– Control of ore recovery and waste dilution

Infrastructure– Type of hauling and hoisting– Ventilation and water handling– Size and conditions of drifts and ramps– Possibility for automation

Under ground mining

Under ground mine infrastructure

Under ground mining methods– Room and pillar mining

Common for flat ore bodiesHigh production and low costGood productivityOre lost in pillars

Under ground mining methods– Open stoping

Common for steeply dipping ore bodiesCan be deepGood production rateModerate to high costHigher dilutionHigh capital cost

Under ground mining methods– Block caving

Common for massive oresCaveable rockCan be deepHigh production Low costVery high capital costNo selectivityHigh dilutionSurface subsidence

Under ground mining methods– Cut and fill mining

Common for steeply dipping irregular ore bodiesHigher grades neededModerate productionHigher costMore ground support with depthGood recovery and controlled dilutionFlexible method

Open pit mining

Open pit sequencing – push backs

1234

56

78

9

Production flow

PB 1

PB 2

PB 3

147

2

11

68

10

1011

1312

1412

1720

23

18

1614

1210

8

Solutionpush backs

Critical phase

Critical phase2

1

34567

89

Economy cash flow

The Aitik Mine 1968– 2 million tonnes per year

The Aitik Mine early 70’s– 6 million tonnes per year

Mill & workshop


Crusher

WorkshopMill

Railwayterminal

Conveyor belts


Open pit mining cost distribution– industry average

Mining 50%– Drilling 5%– Blasting 6%– Digging 9%– Hauling 30%

Milling 50%– Grinding 30%– Flotation 10%– Dewatering 10%

Mill




LEACHING

FLOTATIONGRAVIMETRY

WASTE ROCK

ORE RESERV

ORE

GRINDINGCRUSHING

TAILINGS



METALS


MINE

MILL

LEACH/SX EW

About the mill process

Grinding is the major part in milling costs The choice of grinding technology is crucial, Boliden type of autogenousgrinding (AG) has proved to be the most cost efficientSemi autogenous grinding (SAG) is by far the most used technologyFlotation separation, based on surface chemistry, is the outmost important technology to separate base metal minerals from waste rock – products are called concentratesThe flotation process is adopted to the specific ore type when it comes to equipment, circuit lay outs and reagent regimeSince flotation is a wet process the concentrates must be dewatered, dewatering technology can vary depending on proprieties of the concentrate and customer demandLeaching process is used solely to recover the gold/silver content that not reports to concentrates

Millsgrinding

Water addition

Filtersdewatering

Thickeners(dewatering)

Flotation Circuitseparation

Crusher

Mill (Ore Dressing Plant, Concentrator)

Boliden ABEnhet/verksamhet 2008-10-28

Fragmentation, crushing and grinding


Communition – industry average cost distribution

Blasting 1%

Coarse crushing 2%

Fine crushing 20%

Grinding 77%


Grinding mill

Waste

Ore (pulp)Chemicals

Air

Flotation cells

Concentrate

Dewatering - thickeners


Dewatering of Concentrates – pressure filter

Fully automaticCapacity up to 250 t/h

Mill and leaching plant at Boliden Area Operations

Tailings and waste rock disposal

Tailing PondWaste Rock Dumps

Stekenjokk – reclaimed minesite

Heap Leaching SX EW




LEACHING

FLOTATIONGRAVIMETRY

WASTE ROCK

ORE RESERV

ORE

GRINDINGCRUSHING

TAILINGS



METALS


MINE

MILL

LEACH/SX EW

Typical porphyry copper ore

Heap Leach SX EW Ore

Flotation Ore

Heap leaching SX EW

The process is normally applicable to oxide minerals (the upper weathered zone of the ore bodies)

Some 20% of copper production is coming from HL operations

Some applications on zinc and nickel have recently started

The heap leach process is now in many cases enhanced by use of bioleaching in order to recover primary minerals

Heap leach process – copper

Heap leach operation

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